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Europe Claims Its Newest Victim: Apple

Looking at last quarter’s iPhones sales, the U.S. was up 47%, Japan up 45%, mainland China up more than 100% -- and Europe was essentially flat.

That pain extends across most the continent, except the U.K., which saw 30% growth. However, France, Greece, and Italy had particularly poor showings, and Germany’s growth only managed single-digit gains.

It’s important to note a couple of things, here. Greece is one region where we’ve seen pushback against from carriers on subsidizing the large, upfront iPhone cost amid economic hardships. Portugal and Spain are two notable other countries where we’ve seen carriers push back, and Apple didn’t single out growth rates in either aside from saying Western Europe was its greatest weakness in terms of geography.

For the time being, the iPhone continues to be largely subsidized in areas like the U.S. and U.K. -- well-performing markets -- but this is something for Apple investors to keep watching.

In the first quarter released this year, Europe saw 46% growth for Apple. Last quarter, it saw 16% growth from the previous year. Considering the company as a whole grew earnings by 23%, that might not seem like a huge drop in growth, but remember that Europe is part of the EMEA region, meaning Apple can be carried by Africa, Eastern Europe, and the Middle East in the segment even if Western Europe -- where Apple’s subsidy model is under threat – is seeing slower growth. I don’t think Western Europe is the canary in the coal mine, but it shows how comfortable Apple is dominating the industry norm of subsidized phones, and how it would be hurt by any major changes.

To see Eric’s full thoughts on Apple and its European woes, watch the video below.

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Author

Eric started at The Motley Fool in 2008 working in the Tech & Telecom sector. Today, he's the General Manager of Fool.com. You can follow him on Twitter to stay up to date with his tech industry analysis. Follow @bleekertech